United States District Court, District of Columbia
Christopher M. Brown, Meaghan E. Hearn, Ackerman Brown, PLLC, Washington, DC, for Plaintiff.
Sherlock Valentino Grigsby, Law Office of Sherlock Grigsby, Washington, DC, for Defendant.
AMY BERMAN JACKSON, District Judge.
Plaintiff FutureGen Co. (" FutureGen" or " the company" ) brings this action against defendant Richard Carter (" Carter" ) alleging: (1) conversion and civil theft, (2) fraud, (3) fraudulent conversion, (4) constructive fraud, (5) unjust enrichment, (6) breach of fiduciary duty, and (7) constructive trust. Compl. [Dkt. # 1] ¶¶ 43-88. Carter has moved to dismiss this action for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), and, in the alternative, for forum non conveniens. Def.'s Mot. to Dismiss [Dkt. # 29] (" Def.'s Mot." ) at 1, 7. Because the Court concludes that it lacks personal jurisdiction over Carter under the District of Columbia's long-arm statute, D.C.Code § 13-423 (2001), it will grant Carter's motion without reaching a decision on the forum non conveniens argument.
According to the complaint, FutureGen is a capital and asset management company with a principal place of business in Washington, D.C. Compl. ¶ 2. FutureGen also admits in its complaint that Richard Carter lives in Illinois. Id. ¶ 4. On September 30, 2010, FutureGen's president and CEO, Lawrence Schmidt, who was based in the District of Columbia, offered Carter a position as the company's distressed asset/debt fund manager via electronic mail. Id. ¶¶ 9, 12. On October 17, 2010, Carter executed his employment agreement with FutureGen, mailed it to Schmidt, and began working. Id. ¶¶ 11, 17. In its complaint, FutureGen further admits that Carter was employed in and conducted his duties from the company's Chicago office. Id. ¶¶ 5, 10. But in an attempt to establish personal jurisdiction, the complaint points to three occasions where Carter traveled to the District to conduct company business: on June 3-5, 2010 and on February 3-5 and July 7-8, 2011. Id. ¶ 7.
With respect to alleged tortious conduct, FutureGen asserts that in November 2011, Carter entered into an unauthorized purchase agreement with Haven Acquisition Management, LLC (" Haven" ) on behalf of FutureGen and instructed Haven to wire the proceeds of the transaction to his personal bank account in Lake Zurich, Illinois. Id. ¶¶ 23-24. The company also contends that around the same time period, Carter " embarked on [another] complex scheme to syphon substantial funds from FutureGen." Id. ¶ 33. According to the complaint, Carter implemented the scheme by creating a sham company, drafting phony and forged contracts between the sham company and FutureGen, and sending the phony contracts to Schmidt to approve the wiring of FutureGen funds to bank accounts controlled by Carter. Id. ¶¶ 34-38. Carter also allegedly attempted to conceal his fraudulent behavior by creating and using a false email account in the name of the sham company to communicate with Schmidt regarding the phony contracts. Id. ¶ 40. Lastly, FutureGen alleges that Carter stole money from the company a third time in January 2012 by inflating the price of a debt pool that Haven was selling to FutureGen and instructing Haven to funnel the excess proceeds directly to Carter's Illinois bank account. Id. ¶ 42. FutureGen admits in its complaint that Carter engaged in these activities from Illinois. Id. ¶ 10.
On May 3, 2012, FutureGen brought a seven-count action against Carter in this Court seeking compensatory and punitive damages, and other equitable relief. Id. ¶¶ 1, 43-88. Carter has filed a motion to dismiss on the grounds that the Court lacks personal jurisdiction over him and that the District is not the proper forum for this action. Def.'s Mot. at 1, 7. FutureGen maintains that the Court has personal jurisdiction under the District's long-arm statute and that exercise of jurisdiction would satisfy the requirements of due process. Pl.'s Mem. in Supp. of Opp. to Def.'s Mot. to Dismiss [Dkt. # 31-1] (" Pl.'s Mem." ) at 3, 7.
STANDARD OF REVIEW
The plaintiff bears the burden of establishing personal jurisdiction over each defendant. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C.Cir.1990). To survive a motion to dismiss for lack of personal jurisdiction, the " plaintiff must make a prima facie showing of the pertinent jurisdictional facts." First Chi. Int'l v. United Exch. Co., 836 F.2d 1375, 1378 (D.C.Cir.1988). To establish that personal jurisdiction exists, the plaintiff must allege specific acts connecting the defendant with the forum. In re Papst Licensing GMBH & Co. KG Litig., 590 F.Supp.2d 94, 97-98 (D.D.C.2008), citing Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001). The plaintiff " cannot rely on conclusory allegations" to establish personal jurisdiction. Atlantigas Corp. v. Nisource, Inc., 290 F.Supp.2d 34, 42 (D.D.C.2003).
" A court may consider material outside of the pleadings in ruling on a motion to dismiss for lack of ... personal jurisdiction[.]" Artis v. Greenspan, 223 F.Supp.2d 149, 152 (D.D.C.2002). However, " the plaintiff is not required to adduce evidence that meets the standards of admissibility reserved for summary judgment and trial; rather, [the plaintiff] may rest [its] arguments on the pleadings, ‘ bolstered by such affidavits and other written materials as [it] can otherwise obtain.’ " Urban Inst. v. FINCON Servs., 681 F.Supp.2d 41, 44 (D.D.C.2010), quoting ...